This time, I would like to share important news for those who plan to receive pensions from both Japan and the United States, or who are already receiving them.
What are WEP (Windfall Elimination Provision) and GPO (Government Pension Offset)?
I have received the following question from many clients:
“I heard that if I receive a pension from Japan, my U.S. Social Security benefits will be reduced. Is that true?”
Until now, WEP and GPO have worked as follows:
WEP（Windfall Elimination Provision）
If you receive a foreign pension such as the Japanese Employees’ Pension Insurance (Kosei Nenkin), your U.S. Social Security retirement benefits would be reduced.
GPO（Government Pension Offset）
If you receive a public pension not covered by Social Security (such as the Japanese pension), your U.S. spousal or survivor benefits would be reduced by two-thirds of your foreign pension amount.
Repeal by the Social Security Fairness Act
On January 5, 2025, the Social Security Fairness Act came into effect, repealing the provisions of WEP (Windfall Elimination Provision) and GPO (Government Pension Offset) that had been applied until now.
Key points
- From January 2024 benefits onward, reductions under WEP and GPO will no longer apply.
- You will be able to receive your U.S. Social Security benefits based on the original calculation formula even while receiving your Japanese pension.
Examples
Case 1: Retirement benefits (Impact of WEP repeal)
Yukari started receiving her Japanese pension at age 62 and plans to receive U.S. Social Security at age 65. Until now, her U.S. benefits could have been reduced by hundreds of dollars due to her Japanese pension, but from now on, she is likely to receive the full amount calculated under the original formula.
Case 2: Spousal and survivor benefits (Impact of GPO repeal)
Nao has been receiving the Japanese Employees’ Pension Insurance and is about to receive her deceased husband’s U.S. survivor benefits. Previously, two-thirds of her Japanese pension amount was deducted from her U.S. survivor benefits, but with the repeal of GPO, she will now be able to receive the full amount.
How far back will it be retroactive?
- The last month WEP and GPO were applied was December 2023.
- From January 2024 benefits (usually paid in February), there will be no reduction.
- For those who have already been receiving benefits, back payments for the increased amount from January 2024 will be made in a lump sum.
Currently, the Social Security Administration (SSA) is adjusting benefit amounts sequentially, and for complex cases, it is said that it may take up to one year to complete the adjustments.
Summary
For those who have thought, “My U.S. Social Security benefits are reduced because I receive a pension from Japan (or other countries),” this legal change is significant. It can be said that it has created a system where you can properly receive the pension amounts you have paid into in both Japan and the United States.
I myself plan to receive pensions from both Japan and the U.S. in the future, so I am personally very happy about this news.
It is reassuring to know that all the years we have worked hard will be returned to us in the form of secure retirement income.
I will continue to provide easy-to-understand updates on pensions and Social Security like this. If you have any questions, please feel free to contact me.
📺 Want to Understand More About How U.S. Social Security Benefits Are Calculated?
For readers who want to gain deeper insights into how your years of work affect your future Social Security benefits, we recommend watching this video:
▶️ Does Working Longer Really Increase Your U.S. Social Security? | The Truth About the 35-Year Rule
Many people believe that “the longer you work, the more you’ll receive,” but the truth is more nuanced.
In this video, I explain the 35-Year Rule clearly, with real-life case studies to help you understand how your work history can influence your retirement benefits — and what steps you can take to prepare for the future.
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